Because processes like these gather steam over time, it’s easy for those who favor change to lose hope. But just as hopelessness makes it more difficult to surmount obstacles along individual paths to success, it also inhibits social change. So it’s important for advocates of change not to lose hope, provided any reasonable grounds for hope remain.
As President Nixon’s chief economist Herb Stein once famously remarked, “If something cannot go on forever, it will stop.”20 But what, exactly, could stop a process that grows steadily more powerful over time? The answer is an opposing process that also grows steadily more powerful over time.
Those lobbying for lower taxes and less stringent regulation are unlikely to change their behavior in response to appeals on behalf of society as a whole. Most of them no doubt sincerely believe that their own interests coincide with society’s.

Deserving Mention
The four Elements ETNs Linked to Rogers International Commodity Index Total Return: RJI, linked to the performance of the entire basket of thirty six weighted commodities; RJA, linked to the twenty commodities of the RICI agriculture subsector ETN; RJN, an ETN linked to the performance of the RICI subindex of six energy commodity futures contracts; RJZ, an ETN linked to the ten-metal commodity subindex of the RICI.
CHAPTER FIFTEEN
Bonds
A Crash Course
If something cannot go on forever it will stop.
—Herbert Stein
Every valley shall be filled, and every mountain and hill shall be brought low.
—Luke 3:5
A Family Affair
Beginning with gold and silver coins, to our recommendations in oil, agriculture, and other natural resources, everything recommended to this point has been something tangible or a means of investing in the producers and the prices of something tangible.

In the run-up to the crisis, banking became about banks and not businesses; transactions not relations; counterparties not clients. New instruments originally designed to meet the credit and hedging needs of businesses quickly morphed into ways to amplify bets on financial outcomes.”7
It became a matter of time until all this illustrated Herbert Stein’s famously simple yet elegant formulation about the unsustainable: “If something cannot go on forever, it will stop.” And when it stopped, it did so in an abrupt and incredibly damaging manner.
CHAPTER 6
CASCADING FAILURES
“Everyone has a plan until they get punched in the mouth.”
—MIKE TYSON
“These are days when the improbable can become the inevitable.”
—JIM DWYER
Rather than mark a decisive victory over the vagaries of the business cycle, the golden age of central banking ended up underpinning an historic period of excessive and irresponsible risk taking.

Governments can’t possibly honor the much greater burden of future pension and social entitlements implied by today’s systems, if they were to carry forward into the future. What does this mean? How will the dual debt crisis unfold?
WHAT WILL GOVERNMENTS DO?
The debt time bomb is metaphorical—and metaphorical devices never explode because unsustainable trends are not sustained. (This is a version of Herbert Stein’s Law, which he expressed as: “If something cannot go on forever, it will stop.”) The accumulation of debt, a massive obligation we have imposed on people in the future, will therefore lead to certain more or less inevitable changes. There are a limited number of ways this can work out, and the less unpalatable routes will require an explicit acknowledgement that present choices are required by future obligations.
What are the possibilities? The debts incurred by rich Western countries represent a transfer of resources from the future to the past, and also from future citizens of other countries, to the extent that foreigners are buying the government bonds being issued to raise the money.

But just as consumers had been enabled by innovation to pursue their interests independently from the larger society, companies, too, had discovered how to use innovation to separate their own fortunes from those of their workers. Whatever sense of common purpose or social duty corporate America had espoused in the postwar period was now largely gone. From here on out, the corporation would use its massive efficiencies and innovative power solely for its own narrow self-interest.
As the economist Herb Stein once argued, “If something cannot go on forever, it will stop,” and although Stein was talking about the U.S. trade deficit, one could just as well apply that statement to today’s approach to innovation. Sooner or later, markets correct themselves. Companies that spend too little on real innovation, for example, will run out of things to sell. Companies that demoralize their workforces will see performance lag. Companies that rely too heavily on the cheapness of foreign labor eventually get pushback over quality problems.

Taking these items into consideration, BCG declared in Made in America in August 2011, “Within five years, the total cost of production for many products will be only about 10 to 15 percent less in Chinese coastal cities than in some parts of the U.S. where factories are likely to be built,” like South Carolina, Alabama, and Tennessee.
The economist Herbert Stein is remembered for coining the maxim “If something cannot go on forever, it will stop.” That applies equally to foreign countries and the United States. In the coming years “a surprising amount of work that rushed to China over the past decade could soon start to come back—and the economic impact could be significant,” said Harold L. Sirkin, a BCG senior partner and the coauthor of Made in America. As soon as 2015 the changing calculus “should prompt companies to rethink where they produce certain goods meant for sale in North America.”

One of Buffett’s main points was that companies—many of which had been taking gains from surpluses out of their pension plans—were irresponsibly using unrealistic rates of return assumptions and would have to adjust these to reality, which would show the plans to be less well funded or even underfunded.
18. Herbert Stein was an American Enterprise Institute fellow and former chairman of the Council of Economic Advisors under Richard Nixon, a member of the board of contributors of the Wall Street Journal, and an economics professor at University of Virginia. He is known for the quote “If something cannot go on forever, it will stop,” and was father to financial writer and actor Ben Stein.
19. As quoted in “Buffett Warns Sun Valley Against Internet Stocks,” Bloomberg, July 13, 2001.
20. Vicente Fox worked for Coca-Cola for fifteen years, starting as a route supervisor in 1964, then being promoted ten years later to president of its Mexican, and ultimately its Latin American, operations.
21. Interview with Midge Patzer.
22.